How to Evaluate, Compare, and Leverage Financial Aid

You’ve gone through years of late nights, hours of study sessions, months of writing and rewriting essays, 30 minutes in a nerve-wracking interview, and an excruciating period of waiting that seems to transcend all measures of time. Finally, the day arrives. You get an email from your dream school heralding the good news – you’ve been accepted! You log on to your new student portal and check your financial aid award information. But where you’re expecting a simple, easy to understand number telling you how much money you’ll need to pay to attend this school, you’re faced with an array of figures and designations that don’t make much sense. Even worse, after puzzling through your award letter, you realize the cost of attendance exceeds your family’s budget. Receiving your financial aid award can put a damper on the excitement of getting accepted to college, especially if your budget is tight, but it doesn’t mean all hope is lost. There are steps you can take to understand, appeal, and leverage your award in order to make the best informed decision about where to attend college.

Understanding Your Award Letter

Before you take any further action, it’s important to first ensure you totally understand the contents of your award letter. Most award letters contain 3 components: a summary of the total cost of attendance, a breakdown of your family’s individual “need” as determined by the institution and/or any scholarships awarded, and the amount you’re expected to pay in the coming year.

A quick look at only the cost of attendance can be worrisome, as it may greatly exceed your expectations, but there’s no reason for alarm; the school is just breaking down individual costs so you as a potential student are aware of how your money would be allocated should you choose to attend.

The second component of the letter will detail your family’s “need” as determined by the institution (assuming your school is offering you need-based aid). This is the amount the school has determined you need to be awarded in order to bring the cost of attendance to within your family’s budget. Oftentimes, need will be divided into two categories: parent contribution and student contribution. The student contribution is usually significantly smaller than the parent contribution, unless your need-based grant is very large, and is comprised of the amount that students are expected to contribute to their education through summer employment, personal savings, or other means. It’s important to note that at most universities, unless the need-based grant awarded to your family is relatively small or you’ve received a large amount in scholarships, this is the only area that will be covered by outside scholarship money. Once the total cost of the student contribution has been offset by scholarships, additional funds earned are subtracted from the need-based grant, not the parent contribution. Therefore, once you’ve earned scholarships that cover the cost of your student contribution, you need to earn more than the total amount of your aid package in order for your scholarships to decrease the amount you’re expected to pay. If you’ve been accepted to a school that is not offering you need-based aid, or a combination of need-based and merit-based aid, this section will also include any merit-based scholarships you may have earned, and their amount. Merit-based scholarships may be awarded by schools for academic, athletic, or extracurricular performance, and may only be offered one year or renewed annually.

The final component of the letter will state the amount you’re expected to pay the coming year in order to attend. This figure is determined by subtracting your need and scholarships, as determined by the institution, from the total cost of attendance. Some financial aid packages include work-study, loans, or both. Work-study is a federal program that requires students to work part-time on campus in order to earn some portion of their scholarship. Loans can be either public (granted by the government) or private (granted by the institution or a third party) and have differing stipulations, requirements, and interest rates that should be thoroughly researched.

Making an Appeal

It’s unfortunately common that the financial need of a family as determined by a school is not reflective of a family’s true financial situation. While financial aid officers go through a rigorous process to award a fair amount to each family through extensive review of each family’s FAFSA, CSS Profile, and/or IDOC packet, there are sometimes circumstances that limit a family’s ability to pay that aren’t fully conveyed through tax returns, or that have arisen after submission of financial aid materials.

Whether it’s a parent’s termination from employment, unexpected medical bills, or other unforeseen circumstances, it’s extremely important that you make every effort to convey any significant changes in your family’s financial situation to the financial aid department of your school. The university’s you’ve been accepted to truly want you to be able to attend; that’s why they chose you! Financial aid officers exist to work with you to make attending their school a realistic and accessible option, so don’t hesitate to get in contact with an officer from your school. Even if you don’t think it will make a difference, it’s always worthwhile to file an appeal on your financial aid decision.

Usually, an appeal involves writing a brief summary of how your financial situation has changed or how your tax materials are not fully reflective of your family’s financial situation. Depending on the basis of your appeal, you may also be asked to submit additional documentation, such as a copy of a parent or guardian’s letter of termination. Complying with the requests of the financial aid office in a timely manner is your best bet to successfully appeal your award.

Leveraging Aid Packages

Many schools allow you to “leverage” your aid package by providing proof that a “peer institution” has offered you a more generous award. Peer institutions are schools that are generally considered to be of more or less equal academic caliber as the school in question; for example, Ivies will usually only consider matching the aid of other Ivies, or other top 10 universities. If you provide documentation stating a peer institution has offered you a more competitive financial aid package, some schools will match, or even exceed, the other offer. Schools strive to have a high yield rate – that is, the amount of admitted students who choose to matriculate. By beating out competitors on financial aid packages, schools increase their chance of your matriculation, thus increasing their yield. Importantly, schools offering need-based aid will only consider the need-based packages of other schools when reevaluating aid; your full-ride baseball scholarship at your state flagship school won’t get you free admission at Yale.

The most important thing to remember when appealing or leveraging aid is the importance of communication with the financial aid office. It’s easy to perceive the workers of the financial aid office as your adversaries; after all, if they would just give you more money, all your problems would be solved! However, you have to keep in mind that they’ve worked tirelessly to distribute available aid funds in a manner that best serves the entire class, and it is their job to make attending their school a reality for you. Though the process can be lengthy, stressful, and tiresome, it is almost always a good idea to take any steps you can to appeal or leverage an award that doesn’t best suit your family’s needs. Doing so is the best way to make attending your dream school a reality.

Anamaria is an Economics major at Columbia University who's passionate about sharing her knowledge of admissions with students facing the applications process. When she's not writing for the CollegeVine blog, she's studying Russian literature and testing the limits of how much coffee one single person can consume in a day.